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brownbudget.JPGGov. Jerry Brown and legislative leaders are poised to announce a deal on his rainy day fund proposal, including additional general fund contributions to satisfy Republicans, sources said.

The agreement follows private negotiations held after Brown called last month for a special session of the Legislature to take up the proposal. The negotiation is significant because, with three Democratic lawmakers suspended in separate criminal cases, Democrats have dropped below their supermajority status in the Senate, forcing Brown to negotiate with Republicans.

The agreement Brown and lawmakers are negotiating would fund a rainy-day account in years that capital gains revenue exceeds 8 percent of total general fund revenue, a higher threshold than Brown had proposed. But it would also require contributions of 1.5 percent of all general fund revenue, a concession to Republicans, sources said.

The proposal would replace a budget reserve measure already on the November ballot. That measure had been criticized by public employee unions, allies of Brown and Democratic lawmakers.

The original measure, ACA 4, was part of a 2010 budget deal among Democrats, Republicans and then-Gov. Arnold Schwarzenegger and originally scheduled to go before voters in 2012, but lawmakers postponed it to 2014.

The agreement was coming together ahead of the release of Brown's revised budget proposal this month.

Senate Republican leader Bob Huff said Thursday morning, "We're close."

Laurel Rosenhall of The Bee Capitol Bureau contributed to this report.

PHOTO: Senate President Pro Tem Darrell Steinberg, left, Gov. Jerry Brown, center, and Assembly Speaker John A. Pérez, right, celebrate a budget deal with a formal announcement at the Capitol on Tuesday, June 11, 2013. The Sacramento Bee/Randy Pench


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